Three ways veteran business owners can access capital

Veteran-owned businesses are an important part of the US economy. They account for about 6% of all businesses, employ nearly four million workers and contribute over $177 billion in wages to the US economy annually.

Despite this impact, many face unique business challenges, particularly when it comes to accessing the capital needed for growth.

Time spent in service significantly delays the ability to build credit, establish business connections, and tap into available resources—all of which are essential to gaining a foothold in the business world.

For veterans looking to start or grow a business, the right capitalization is key to unlocking your business’s full potential. Here are a few tips to ensure you set yourself up for success:

Create and strengthen your business plan

A robust business plan is essential to securing capital from banks or potential investors, whether for seed funding or late-stage fundraising. This plan serves as a roadmap for evaluating your business and helping bankers and investors decide whether to enter into a relationship with your business.

Your plan should include defined business goals, target markets and customers, and plans for how you will promote your product or service. From there, you can provide estimates of how much capital is needed to meet those goals.

Create a loan to become bankable

Your credit score is often the first metric lenders consider when evaluating you as a potential candidate for capital. If you are an established business, your business credit will be checked. But when you’re just starting out, lenders turn to your personal credit score.

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Building and maintaining good credit is difficult for many Americans, but veterans — especially those who have moved frequently or spent time abroad — building a strong credit history to support their creditworthiness can be particularly challenging. This requires a track record of consistent credit card and personal loan payment history, such as B. Student loans and mortgage payments. However, while on active duty, service members may not have had an opportunity to build that track record.

For those who don’t have a strong credit record, there are countless ways to improve your credit score such as: B. Paying rent and utility bills on time and, if necessary, opening a first credit card to start building a strong repayment history. If you have outstanding debt, focus on paying debt collection agencies and paying off high-interest debt. Also, be sure to double-check your credit report for errors before going to a meeting with a potential investor.

If you have personal credit but want to build business credit, consider applying for a business credit card. Using it for smaller bills each month and then paying it in full before the payment is due can help increase your score. Doing business with multiple vendors who work with credit reporting agencies can also aid in this process. When you purchase supplies and materials from vendors, those purchases and payments are reported to the credit reporting agencies and, in turn, are appended to your credit history.

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While trying to build or improve your credit score may feel like an uphill battle, showing that you are bankable and that you are someone both banks and investors will be happy to work with is a crucial first step .

Identify resources that will help you achieve your goal

Once you’ve created a business plan and started building – or improving – your credit score, it’s time to look at your network. Whether you are just starting out in the business world or looking to take an established business to the next level, having a network of experts to draw on is invaluable.

There are a number of educational and networking programs designed specifically for veterans and veteran-owned businesses that serve as a good place to start, including: Bunker Labs, Boots to Business, and the Veterans Business Outreach Center. Focused on the military entrepreneurial community, these organizations offer incredible programs, resources, mentoring, and guidance to help veterans meet important challenges.

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For example, Bunker Labs offers the unique CEOcircle program. Attendees will have the opportunity to participate in virtual huddles and in-person fly-ins where they can network and learn from both their peers and well-known leaders.

In addition to seeking specific education and networking programs, veteran-owned businesses should definitely consider becoming certified through the Vets First Verification Program because it helps you qualify for federal contracts specifically for retired military personnel. It also allows access to VA-provided resources such as business training, mentoring and networking, all of which are essential for businesses as they get established.

Accessing new capital can feel daunting, especially when you’re just starting out. But with the right planning and the right resources on your part, the likelihood of success is much greater. Time in the service has taught every veteran important lessons. Never lose sight of the fact that your discipline, passion, resilience and resourcefulness are your company’s greatest assets. If you stay true to yourself and proceed thoughtfully, there are no limits.

Terry Hill is a Managing Director, Co-Head of Veteran Initiatives, at JPMorgan Chase Commercial Banking. He leads the Emerging Middle Market practice, which provides services to family-owned mid-market companies in 117 markets in 48 states.


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